European shares hit by Chinese data, miners slump

* FTSEurofirst 300 drops 2.9 pct

* Basic resources stocks hardest hit

* DAX down despite stronger German data (Adds details, updates prices)

By Alistair Smout

LONDON, Sept 1 (Reuters) - European equities fell sharply on Tuesday, with miners slumping after weak manufacturing data from China again raised concerns over the economic health of the world's biggest metals consuming country.

The FTSEurofirst 300 index of top European shares was down 2.9 percent at 1,390.50 points by 1428 GMT, with basic resources stocks plummeting 5.6 percent, making them the top sectoral losers.

Activity in Chinese manufacturing contracted at its fastest pace for three years in August, reinforcing fears of a sharper slowdown in the world's second largest economy despite a flurry of government support measures. The manufacturing Purchasing Managers' Index fell to 49.7 in August, denoting contraction, after recording 50.0 in July.

"Sentiment is very fragile. We are seeing a confirmation of the slowdown in China," Lorne Baring, managing director of B Capital Wealth Management, said.

"European stocks could get even cheaper in this period of volatility but longer term, they look like good value and dividend yields are attractive. We are advising our clients to remain invested in high quality European stocks."

Miner and commodity trader Glencore (Xetra: A1JAGV - news) was down 8.4 percent, the biggest faller in the FTSEurofirst 300 index, while diversified miners BHP Billiton (NYSE: BBL - news) , Anglo American (LSE: AAL.L - news) and Rio Tinto (LSE: RIO.L - news) fell 5.1 to 7.1 percent.

Investor (Stockholm: INVE-A.ST - news) fears over Chinese growth contributed to a drop in European shares in August, with the FTSEurofirst 300 recording its biggest monthly loss in four years on Monday.

"The PMI (Other OTC: PMIR - news) was below 50, which is a psychologically important level and puts into real focus the fact that China is contracting," ETX Capital senior sales trader, Joe Rundle, said.

"With the weak data coming out, we're going to see the negative sentiment from the last few weeks continuing," he said.

Germany's DAX, which has substantial exposure to China, fell 2.5 percent despite data showing factory activity at a 16-month high and the jobless rate at a record low. In aggregate, euro zone manufacturing growth eased last month, with Italian and French factory PMIs falling.

Among individual fallers, shares in British hedge fund manager Man Group (LSE: EMG.L - news) fell 6.8 percent following a report the head of its China unit had been taken into custody as part of a probe into the country's recent market volatility.

Bucking the trend, Sweden's Elekta (Stockholm: EKTA-B.ST - news) jumped 7.2 percent after reporting first quarter earnings, making it the biggest riser on the STOXX Europe 600. Traders cited an upbeat sales forecast as supporting the health care firm.

Europe bourses in 2015: http://link.reuters.com/pap87v

Asset performance in 2015: http://link.reuters.com/gap87v

Today's European research round-up (Additional reporting by Atul Prakash; Editing by Alison Williams)